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Study suggests neither cap-and-trade nor carbon tax have made significant impact on reducing GHG emissions

The European Union implemented a cap and trade scheme in 2005 for reducing carbon emissions; Scandinavian nations (including the non-EU state of Norway) had independently imposed a carbon tax in the 1990s as part of their effort to reduce carbon emissions. US researchers have tracked the carbon disclosures from both regions of Europe and found that neither the EU’s carbon allocation scheme nor Scandinavia’s carbon taxes have made a significant impact on reducing greenhouse gas emissions.

Writing in the International Journal of Critical Accounting, Martin Freedman of Towson University and colleagues explain that when the Kyoto Protocol went into effect in 2005, the EU-15 designed a system of tradable carbon allowances as a preliminary step in the implementation of Kyoto. Freedman and colleagues looked at selected firms affected by Kyoto and analysed their disclosures on reduction of carbon emissions in Europe.

The team reports that on the whole neither the carbon tax nor the cap-and-trade system appears to have been very effective in achieving the goals of Kyoto during the period studied. It is impossible to say whether or not they led to any measurable changes in industry, according to the team.

The EU committed to reducing its greenhouse gas emissions by 8% of the 1990 level with a deadline of 2012. The data analysed so far does not suggest that these targets will be met in time. With much of the world experiencing a recession, and with weather patterns in flux, other variables may contaminate any findings from an extended analysis, the team says.

Based on the data from EU ETS and the carbon market data, we determined that it is not possible to say which method was more successful. Much of the success depends on setting limits that will change behaviour. Since these limits have economic consequences, finding the political will to implement these changes is a difficult undertaking. Although some of the taxes might have caused changes in industries and some of the allocations may have altered behaviour, on the whole neither system appeared very effective.

...This study has some limitations. Only a snapshot of data concerning carbon emissions over a unique three year period was examined. It is possible that examining different aspects of carbon emissions and conducting that examination over a longer period would have led to other conclusions. Also, focusing on the Scandinavian nations, Germany, and the UK represents a minority of the EU-15, so this provides only a partial analysis of the European experience with cap and trade and carbon taxes.

—Freedman et al.

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Comments

ai_vin

"...This study has some limitations. Only a snapshot of data concerning carbon emissions over a unique three year period was examined."

Well, duh.

Larzen

"schemes" won't work. They were meant to make money for politics and politicians. Forestation programs will, as long as they weren't created to finance political slush funds.

ai_vin

They haven't been given TIME to work.

Rick Crammond

Of course those plans made no difference to emissions. Most school kids could have figured that out years ago. The incentive was to make money, not to cut back on pollution.

There is only one way to stop emissions...simply stop the burning. And why keep burning when we have much better choices now? There are plasma-based technologies available for countries that want it. Cheap power with no pollution, no waste, and no radioactive byproducts.

It's time to stop the burning.

ToppaTom

If the carbon tax and cap-and-trade do not work, just implement more rules, taxes, regulations, limits and policies with more bureaucrats and more complex schemes.

And, of course allow some favored ones to opt out.

ai_vin

There are plasma-based technologies available for countries that want it. Cheap power with no pollution, no waste, and no radioactive byproducts.

Oh please, tell me you're not another follower of Rossi/Mills.

Arne

To prove this conclusively you would have to do a double blind study. Which is of course impossible.

"Since these limits have economic consequences, finding the political will to implement these changes is a difficult undertaking."

Oh really? What shocking news. If you implement a system but then fail in the execution, was the system bad by design or did the politicians fail? If an airplane crashes, does that prove that air transport is a bad idea or was it just a lack of maintenance?

The average European car is much more fuel efficient than the average US car. Would the $ 8 petrol have anything to do with that? Those professors are trying to tell us one has nothing to do with the other. That doesn't pass the sniff test.

"Although some of the taxes might have caused changes in industries and some of the allocations may have altered behaviour, on the whole neither system appeared very effective."

Everything laced with uncertainties. I suggest these so-called 'scientists' report back when they have some real data and more precise conclusions can be drawn. This is all conjecture.

Jay Alt

The so-called scientists are all accountants. In his spare time Martin Freeman played Arthur Dent in Hitchhikers Guide. So, whatere you do - DON'T PANIC!.

ai_vin

Same name - different person.

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